* “Over the past four decades, September has been the best time for gold in terms of its month-over-month price appreciation. You can see this on the chart below – in a typical year, the price of gold in September rises 2.5% above its August price. The gold price has risen in 16 of the 20 Septembers since 1989, by far the best success ratio of any month of the year,” reports Kitco.

* “Holding physical gold has both maintained and increased buying power over the last half century. Therefore, the simplest solution to protecting your time, labor and your family’s nest egg is by converting a portion (10%-25%) of your wealth, which is being held in unstable dollars, into the most stable currency in the world: gold,” said Craig R. Smith Swiss America Chairman.

Over the past couple of months, gold and silver have been uneventful. In this report I have posted weekly charts to show the larger trend of gold and silver. Also I have provided small charts of the US and Canadian gold stock funds GDX and XGD.

Because this report has weekly charts, which are a slow and dull time frame to follow, I have added another one of my Kitco Spot Gold Overlay trades, which is a short day trade to liven things up.

GLD ETF – Gold Bullion Price Action – Weekly Chart
I spoke with a few members last week, who wanted me to change my analysis for gold, which I agree with. So I would like to address this now to keep everyone on the same path.

In previous reports I have pointed out the reverse head & shoulders pattern in this weekly chart below. But to be honest, it is not a reverse head & shoulders, which everyone is saying it to be.

Why is gold not in a reverse H & S pattern? Because a reverse H & S pattern is just that, it means the price will reverse from the previous trend. A reverse H & S happens after a downtrend, which forms a bottom and the trend is not moving higher.

Gold has been moving higher, which you can see in 2007 and this large pattern is more like a Cup & Handle pattern – extremely bullish.

SLV ETF – Silver Bullion Price Action – Weekly Chart
Silver is trading a little different than gold. As you can see the price is trading much lower than the 2008 high. There are also two small patterns forming, which are a small head and shoulders top or a bullish pennant.

Last Friday we saw gold and silver prices jump, but until we get a low risk entry point, I continue to watch these commodities move inside their large weekly price patterns.

US & Canadian Gold Stock Funds
These small charts show how bullish the price action is this year for gold stocks. But the exciting part, which is tough to see here, is that the Canadian fund is starting to show bullish price action. When both the US and Canadian gold funds are moving together, it means there will most likely be some tradable moves in the near future. Let’s keep focused and ready to take action in the coming weeks, as these bull flags near the end of their cycle.

Day Trading Spot Gold – Day Trading GLD ETF
I will keep this short because I have written about this once before and below is the link to read my gold trading strategy in detail.

Day trading spot gold using the real-time kitco overlay chart is what I use to identify a possible day trade. The shaded box below shows a simple waterfall sell off and when I see that price action, I will generally take a position the next day around that time for a short trade in GLD.

I did not think to save this kitco chart until the following day so the waterfall price action was miniaturized because of Fridays rally. Also I would like to note this waterfall pattern happened 3 times in a row last week and I took advantage of them.

My Basic Strategy
Gold tends to move similar to what it did the previous day and traders know this, which is why the patterns starts 5-30 minutes earlier the following day, as we anticipate the move. Moves tend to repeat for up to 3 days. So you identify a sizable move and take action on it the following two days, as long as the rest of the day trades similar to the previous days. I like to scale into positions and once I see it going my way I add one final position to increase my exposure.

I am sure some of you are wondering how I traded GLD at 8am ET?
I trade with an online broker that allows me to trade pre-market and post market hours. Not very often these setups happen before 9:30am ET but last week it did.

Important note:
Once you see the price of gold making opposite moves of the previous day, minimize your position or don’t take the trade. As you can see in this chart below, the red line is starting to move the opposite way of the previous day (baby blue line) and later in the afternoon it was completely the opposite. This is a warning that there is a shift in the buyers/sellers and you can see the next day prices spiked higher in the opposite direction.

Read my previous Gold Day Trading Guide:
http://www.thegoldandoilguy.com/articles/spot-gold-price-charts/

Technical Gold Trading Conclusion:
Overall precious metals are trending sideways in their bullish patterns and we are waiting for some low risk entry points.

During slow trading times, which we are currently in, I like to look for other profitable positions to satisfy my need to trade. As a full time trader, it is important to have a few styles of trading, which allow you to profit in any market condition. My main focus is on the commodity ETF’s, with low risk setups, but I also day trade GLD when opportunities arise and I also trade extremely over bought/oversold index plays using the leveraged ETF’s and focusing on my Active Trading Partners stocks trades, which provides profitable trades week after week. Combining these trading styles allow me to pull money from the market week after week without forcing any positions. I just let perfect setups unfold and I take advantage of them.

Soon I will be providing these gold day trades and index trades for members, which I think is very exciting. If you would like to receive my free weekly trading reports please visit my website at: www.GoldAndOilGuy.com

I didn’t believe it either until I saw the proof with my own eyes…Click here for the full report

Genius chess player with a certified I.Q. of 157 unveils his ’sneaky’ (and 100% legal) trading system which can…

… secure net profits up to $1250
… not in days or weeks
… but just 59 minutes or less

Click here for the full report

GLD Gold Trading Fund – Weekly Chart
As you can see on this weekly chart gold has been consolidating for the past 5 months. This bullish pennant pattern is hinting that prices will breakout to the up side in the coming weeks. If for some reason we see the USD rally then I expect to see the price of gold move down as traders rush to sell their gold bullion. I continue to watch and wait for the next buy signal for gold.

If you would like to receive my Free Weekly Trading Reports or my Real-Time Trading Signals for ETF’s and Stocks please visit my websites at: www.GoldAndOilGuy.com or www.ActiveTradingPartner.com

October gold closed slightly higher on Wednesday as it extends this month’s trading range. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above 972.70 or below 906.40 are needed to confirm a trading range breakout and point the direction of the next trending move. First resistance is the reaction high crossing at 962.00. Second resistance is the reaction high crossing at 972.70. First support is last Monday’s low crossing at 930.20. Second support is the reaction low crossing at 926.50.

“Gold’s ‘breaking out’ to a higher level as imminent. We will see the market move through the bull market highs of $1,040 very, very quickly,” Chris Locke, managing director at Oystertrade.com Management, told CNBC Wednesday. Other analysts have said the precious metal could shine again as inflation fears resurface.

* “Gold’s broader appeal certainly stems from its spectacular price climb. Prices in the spot market are roughly 270% higher than a decade ago. Contrast that with an equal investment in the Dow back in August 1999. Without dividends from their 30 blue-chip stocks, Dow investors would have lost money. Even with dividends, something gold doesn’t pay, the Dow has returned only a 9.3% gain, which amounts to less than 1% per year over a decade,” reports ChicagoTrib

October gold closed higher on Tuesday but remains below the 10-day moving average crossing at 945.10 as it extends this month’s trading range. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. Closes above 972.70 or below 906.40 are needed to confirm a trading range breakout and point the direction of the next trending move. First resistance is the reaction high crossing at 962.00. Second resistance is the reaction high crossing at 972.70. First support is last Monday’s low crossing at 930.20. Second support is the reaction low crossing at 926.50.

October gold closed lower on Monday and below the 10-day moving average crossing at 945.40 as it extends this month’s trading range. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. Closes above 972.70 or below 906.40 are needed to confirm a trading range breakout and point the direction of the next trending move. First resistance is the reaction high crossing at 962.00. Second resistance is the reaction high crossing at 972.70. First support is last Monday’s low crossing at 930.20. Second support is the reaction low crossing at 926.50.

Gold will surge to next leg to $1,300/oz.: “The price of gold year-over-year was 2% lower. Demand was up 38%. The price of gold, in relation to the increased demand, should be at $1,273/oz., and I suspect it will get there. I like to keep between 10% and 15% in physical gold,” said Victor Gonçalves, producer of Equities & Economics Report to TheGoldReport.

October gold was higher overnight as it extends the rebound off Monday’s low. Stochastics and the RSI are turning neutral hinting that a low might be in or is near. Closes above last Thursday’s high crossing at 962.00 are needed to confirm that a short-term low has been posted. If October renews Monday’s decline, the reaction low crossing at 926.50 is the next downside target. From a broad perspective, October gold has been locked in a broad trading range since February. Closes above 1008.70 or below 870.00 are needed to confirm a breakout of this year’s trading range and point the direction of the next trending move. First resistance is the 20-day moving average crossing at 948.60. Second resistance is last Thursday’s high crossing at 962.00. First support is Monday’s low crossing at 930.20. Second support is the reaction low crossing at 926.50.